Riaz Haq writes this data-driven blog to provide information, express his opinions and make comments on many topics. Subjects include personal activities, education, South Asia, South Asian community, regional and international affairs and US politics to financial markets. For investors interested in South Asia, Riaz has another blog called South Asia Investor at http://southasiainvestor.blogspot.com and a YouTube video channel https://www.youtube.com/channel/UCkrIDyFbC9N9evXYb9cA_gQ

Sunday, May 7, 2017

Comparing Ownership of Appliances and Vehicles in India and Pakistan

Ownership of consumer durables like computers, home appliances and vehicles is often seen as an important indicator of the size and health of the middle classes in emerging economies. Examples of periodic household surveys used by researchers to measure such data include NSS (National Sampling Survey) in India and PSLM (Pakistan Social and Living Standards Measurement) in Pakistan.

Dr. Abdul Ghani has also analyzed household data to show that the percentage of Pakistani households owning washing machines has doubled while car and refrigerator ownership has tripled and motorcycle ownership jumped 6-fold from 2001 to 2014.

Income/Consumption Growth in Pakistan. Source: KSBL

Rapid Income Growth:

Rising ownership of durables in Pakistan has been driven by significant reduction in poverty and growth of household incomes, according to Dr. Abdul Ghani's research. Percentage of households with per capita income of under $2 per day per person has plummeted from 57% in 2001 to 7% in 2014. At the same time, the percentage of households earning $2 to $10 per day per person has soared from 42% of households in 2001 to 87% of households in 2014. The percentage of those earning over $10 per day per person has jumped 7-fold from 1% of households in 2001 to 7% of households in 2014.

Pakistani Middle Class:

Only 5% of Pakistanis in $2-$4 per day per person income group have college degrees. But 20% of those in $4-$10 have college degrees, according to the survey results.

Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

Median wealth data indicates that 50% of Pakistanis own more than $1,180 per adult which is 120% more than the $608 per adult owned by 50% of Indians.

M. Ali Kemal and Ahmed Waqar Qasim, economists at Pakistan Institute of Development Economics (PIDE), explored several published different approaches for sizing Pakistan's underground economy and settled on a combination of PSLM (Pakistan Social and Living Standards Measurement) consumption data and mis-invoicing of exports and imports to conclude that the country's "informal economy was 91% of the formal economy in 2007-08". Prominent Indian economists Abhijit V Banerjee, Pranab Bardhan, Rohini Somanathan and TN Srinivasan teaching at MIT, UC Berkeley, Yale University and Delhi School of Economics believe that India's GDP estimate based on household survey (National Sampling Service or NSS) data is about half of what the Indian government officially reports as India's GDP. Here's a quote from French economist Thomas Piketty's book "Capital in the Twenty-First Century" explaining his skepticism of production-based official GDP figures of India and China:"Note, too, that the very high official growth figures for developing countries (especially India and China) over the past few decades are based almost exclusively on production statistics. If one tries to measure income growth by using household survey data, it is often quite difficult to identify the reported rates of macroeconomic growth: Indian and Chinese incomes are certainly increasing rapidly, but not as rapidly as one would infer from official growth statistics. This paradox-sometimes referred to as the "black hole" of growth-is obviously problematic. It may be due to the overestimation of the growth of output (there are many bureaucratic incentives for doing so), or perhaps the underestimation of income growth (household have their own flaws)), or most likely both. In particular, the missing income may be explained by the possibility that a disproportionate share of the growth in output has gone to the most highly remunerated individuals, whose incomes are not always captured in the tax data."

Who is Dr. Jawaid Abdul Ghani?

The PSLM household data cited in this blog post is taken from a recent presentation made by Dr. Jawaid Abdul Ghani at the Karachi School of Business and Leadership (KSBL) where he teaches. KSBL has been established in collaboration with Cambridge University's Judge Business School. Prior to his current faculty position, Dr. Abdul Ghani taught at MIT's Sloane School of Management and Lahore University of Management Sciences (LUMS). He has a computer science degree from MIT and an MBA from Wharton Business School.

Summary:

Pakistan has managed to significantly reduce poverty and rapidly grow its middle class since 2001 in spite of major political, security and economic challenges. The foundation for the rise of the middle class was laid on President Musharraf's watch by his government's decisions to invest in education and infrastructure projects that led to the expansion of both human and financial capital. My hope is that the continued improvement in security situation and implementation of China-Pakistan Economic Corridor (CPEC) related projects will bring in higher long-term investments and accelerate Pakistan's progress toward prosperity for all of its citizens.

RK: "Worldwide there is only one yardstick to judge auto sales -> Sales of new cars"

The figures I have quoted from Dr. Abdul Ghani are for total cars owned by households, not sales in a given year.

India has about 250 million households vs Pakistan's 30 million. At 6% of households, it translates into vs 15 million cars in India vs 1.8 million cars in Pakistan. And these 6% households in either country are not "middle class" by any definition. These figures are for family owned cars, not utility vehicles (UVs), taxis and vans commercially owned and operated.

Demand for cars in Pakistan exceeds supply. Over 200,000 cars were produced in Pakistan and another 50,000 imported last year.

And car sales in Pakistan are are now rising faster than in India.

Here's a recent Nikkei Asian Review story on car market in Pakistan:

"Indus Motor, a joint venture between Toyota Motor and local conglomerate House of Habib, is doing well with its mainstay Corolla, reporting that sales grew 11% on the year to 65,000 in fiscal 2016. "The market is so brisk that production can't keep up," said Indus Motor Vice Chairman Toshiya Azuma.

Azuma expects even more growth to come. "Demand in India, our next-door neighbor, is about 4 million cars [including commercial vehicles] a year, so annual sales of about 600,000 cars is well within reach in Pakistan." The country has a population one-sixth that of India."

Nearly 90% families in China today have a refrigerator. What about India?The 2016 ICE 360° survey showed that a little less than 30% of Indian families have a refrigerator. At first glance, we may conclude that a fridge is still an aspirational product that doesn’t fit into the majority of Indian families’ budgets. That reasoning however, does not hold up.The same survey showed that even in the top 20% of the richest Indian families, only six out of 10 families have a fridge. This suggests that constraints other than affordability are at work here that influence households’ decision to buy a refrigerator.While a threshold level of income is a necessary condition for the purchase of a refrigerator, it is not the sufficient condition.The 2011 census shows that nearly twice the number of households in rural India own a two-wheeler, which costs much more than a fridge.This kind of hierarchical pattern in the ownership of a two-wheeler and a fridge in India is unlike in any other major economy.So Women can ChillIn a March 2017 paper in the Journal of Quantitative Economics (From Income to Household Welfare: Lessons from Refrigerator Ownership in India, by Sowmya Dhanaraj, Vidya Mahambare and Poonam Munjal), this apparent puzzle is explored.Following a robust statistical methodology and controlling for the impact of a number of other determinants such as regional influences, two factors stood out. One, a refrigerator is unique among all energy-using consumer durables.Unlike the television or air-conditioner, the decision to purchase a fridge depends not only on the access but also reliability and duration of residential power.Unlike a TV, a fridge is of little use unless uninterrupted power supply is guaranteed. Nearly 43% of rural households and 13% of urban households in India either do not have access to electricity, or receive electricity for less than eight hours. This makes it a major constraint to buy a durable such as a refrigerator. In fact, only around half of India’s population receives residential power for more than 16 hours a day.Two, unlike a TV, which is a leisure good, a refrigerator disproportionately benefits women in the family.As a result, a decision to purchase a consumer durable is also driven by their bargaining and decision-making power within a family. And what would tilt the intra-household bargaining power in favour of women? It is largely the function of the education level of women.

India generates enough electricity for its population. Please take a note of that. The problem lies in end user connections and the bureaucracy of it. Gujarat solved that problem by improvising a better metering system and now actually exports excess power.After PM Modi's election this system is being adopted nationwide and in 5-10 years a dramatic shift will transform electrification in underserved areas.

Fresh data from a large-scale nationally representative survey conducted this year (2016) shows that the washing machine has become a more popular household asset than the computer in India. The ‘Household Survey on India’s Citizen Environment & Consumer Economy’ (ICE 360° survey) shows that 11% households own a washing machine while only 6% own a computer or a laptop. The survey covering 61,000 households is among the largest consumer economy surveys in the country.

The survey shows a drop in the proportion of computer-owning households compared to the 2011 census, when nearly 10% households reported having either a computer or a laptop (the census did not report data on washing machines). The ICE 360° survey also shows that 10% households reported having an Internet connection, 1% lower than the proportion of households with a washing machine. But the proportion of households where at least one household member reported accessing the Internet (including those who accessed the Internet at work) is significantly higher at 22%.

The survey also shows that a large majority of Indian households owns a TV today. The 2011 census had showed that 47% households have a TV set. That proportion has increased to 65%, according to the ICE 360° survey. As TV becomes a mass market product, the refrigerator may be turning into the kind of aspirational product that the TV once used to be. A majority of the top quintile owns a refrigerator. A majority of the salaried class also owns a refrigerator. Nationally, 29% households own a refrigerator.

The home appliances business is thriving and key market players expect consumer demand to surge as households generally replace their old appliances with newer models.

According to an assessment, almost all concrete houses in first-, second- and third-tier cities, from posh areas to shanty settlements, have fans. The reach of the television is said to be as high as 80pc. In major cities, almost 60pc of households are said to have fridges and washing machines, on average.

And China is reaping the benefit of the changing lifestyle in Pakistan, as the bulk of key components used in home appliances are imported from the Asian giant, leading companies in the business confirmed.

According to latest PBS figures released on March 24, the production of home appliances — including refrigerators, TV sets, air conditioners and sewing machines — rose 10pc to 1.2m units during July-January 2014-15. The production of the most popular products — fridges and deep freezers — was up 15pc to 0.8m units, against 0.7m units during the same period of the previous year.

And the production of television sets — the second most popular category in electronic goods — grew 5pc to 57,000 units during July-January. But air conditioner and sewing machines declined 6pc and 1pc over the period.

What's the reality behind all the praise for Pakistan's economy?There is no doubt that Pakistan’s economy has seen qualitative shifts towards increased marketisation and commodification in the past two decades. However, the claims extrapolated from these shifts require further scrutiny

Underpinning much of the coverage is a set of core statistics: the country’s GDP growth rate crossed 4 percent last year, and is expected to surpass 5.5 percent in 2017. The stock market rose by 46 percent in 2016, and is now in line for an upgrade to emerging market status by the middle of 2017. Foreign exchange reserves have grown to a record high of $20 billion, while more inflows are expected via a number of big-ticket energy and transit projects under the $57 billion China Pakistan Economic Corridor (CPEC). Finally, measurements by the United Nations Development Program (UNDP) show multidimensional poverty declining from 55 percent of all households in 2005 to 38 percent in 2015.

Beyond macroeconomic indicators, another factor that has received considerable attention in recent coverage is the country’s growing middle class. One recent piece, published in the Wall Street Journal, cited this burgeoning middle class as the primary fuel behind the twin boon of democratic stability and economic growth.

Depending on the definitions used, Pakistan’s middle class is estimated to be anywhere between 5 to 35 percent of the population. Using income-based methods, the Pakistan Institute of Development Economics (PIDE) finds that approximately 55 million people earn between 75 to 125 percent of the overall median income. Credit Suisse, on the other hand, estimates that 9.7 percent of Pakistan’s adult population, around 7 million people, possess wealth between $10,000 and $100,000. By this measure, Pakistan’s would be the 18th largest middle-class in the world.

In the absence of reliable data on changes in the income distribution, a number of other metrics serve as a useful way to gauge Pakistan’s "middle-class revolution". One of these is the ownership of consumer durables: today, approximately 40 percent of all households own a motorcycle while nearly 60 percent own a television, up from 4 and 20 percent respectively in the early 1990s. Similarly, household ownership of washing machines and refrigerators is now in the mid-40s as well, up from under 20 percent just two decades ago. This expanding market for sale of household appliances, along with its untapped potential, has not gone unnoticed by foreign investors. Late last year, the Turkish consumer goods giant Arcelik entered the Pakistani market through a $240 million buy-out of a local white goods manufacturer.

Similar expansion at the upper-end of the consumer market can be gauged from the sale of passenger cars, which rose from 40,000 units in 2000 to nearly 200,000 in 2016. A considerable portion of this market is now financed through credit, as banking outlays for the purchase of automobiles hit an all-time high of $1.1 billion in 2016, up from $415 million in 2012.

Beyond descriptive statistics, the spatial and visual transformation in Pakistan’s expanding urban centres tell a similar story. Private schools and colleges have cropped up everywhere, offering instruction in the English language as their contribution towards personal enrichment and upward mobility. Similarly, new real estate developments in housing and retail can be found selling profitability and modern amenities to investors and consumers respectively. Advertising campaigns for these projects often rely on some variant of an idealised western lifestyle, clearly playing on, and perhaps in part shaping, the aspirations of a vociferous market.

At least one-fourth of urban households in India don't have a separate kitchen, according to recently released data based on the Socio-Economic Caste Census (SECC) carried out by the housing ministry.The survey indicates how nearly 1.7 crore urban households may be using their single room for cooking food as well.This fresh data gains importance considering that different studies have shown how air pollution in kitchens has become a major health concern and that too in urban areas where the ambient air is getting increasingly polluted due to vehicular emission and dust.A recent study published in Elsevier, a journal on environmental research, which assessed people's personal exposure to pollution in Delhi, showed how kitchens can be more polluted than roads.The study mentioned how urban households, particularly kitchens, could be enveloping people in PM 2.5 pollutants as well.Other studies across the globe have also shown how kitchen appliances release colourless pollutants. Kitchens also get more polluted when they lack proper ventilation.In fact, the Pradhan Mantri Ujjwala Yojana (PMUY), launched by PM Narendra Mod, was a big step towards making kitchens smoke-free for women who are often the worst-affected by such pollution.According to SECC data, while Mizoram has the maximum percentage of such households, Bihar ranks second. In Daman and Diu and Kerala, over 90% households have exclusive kitchens.

"The hidden truth behind India’s low refrigerator ownership"- I work for Refrigerator Industry at a senior level and can tell you. India's Refrigerator production is in top 6 world wide. It stands more than 20 Million nos per year. It is growing at 30 % YOY. I am sure it will be in top 3 before 2020. Indians do not prefer to store food in Refrigerator (not even vegetables). They use fresh food daily basis. The only use of fridge is in summer and for cooling water. So penetration is very low.

This is very good comparison between India and Pakistan. What we can learn from this is both countries are suffering from acute electricity crisis. Per capita consumption of electricity will determine future growth of both the countries. Pakistan had been doing well for decades till 1990s but after that it seems like India has had a better growth story for the past 20 odd years.Dr. Riaz what's your forecast for electricity generation and consumption for India and Pakistan for another 20 yrs.

#Smartphone sales take off in #Pakistan. 40 million owned today. http://bit.ly/2pS6WTY via @techjuicepk

As smartphones flood into the country, more and more Pakistanis switch from feature phones to smartphones. Those who have not yet taken them up haven’t done so majorly due to safety concerns, and not for the lack of inclination towards the new trending gadgets. The share of smartphone continuously rises even more in a market equipped with 3G and 4G, that have 35 million mobile data subscribers.

While Apple’s iPhone and the more feature-rich models of Samsung have been favorites among technology enthusiasts and high-income group consumers, low-end models Huawei, Samsung and QMobile are popular because of the reasonable price range they offer. QMobile dominates both smartphone and feature phone markets and holds over 50 % of the smartphone market segment. Last year, Samsung had 20.5% of the smartphone market share while Huawei increased its share from 7.3 % to 8.9%.

The prevalence of smartphones among people-powered the growth of businesses like Careem, which, without owning a single vehicle, has become a successful business worth 1 billion US dollars. Smartphones are the market square for businesses today. As they offer technology connectivity, entrepreneurs expect them to be a selling medium for products and ideas.

The flourish in smartphones in these recent years has seen to it that Pakistani mobile users do not see the mobile phone as a mere communication device anymore. Besides connecting people, phones are now connecting technologies. The arrival of smartphones has meant that your phone is now a camera, as well as a photo editor, a document scanner, weather forecaster, a tiny portable workstation and much more.

Additionally, thanks to new online business and medical technology solutions, this pocketable device promotes health and security, and make traveling, eating, paying bills more enjoyable and simpler experiences. Smartphones have given urban life in the fast lane a boost and profited start-ups and business ventures. It is no wonder that, along with our dependence on these devices, expectations we have from them are rising. Users expect them to provide convenience and solutions in every domain, from health, recreation, and logistics to simplifying daily cumbersome tasks.

IDC expects smartphones to overshadow feature phones by end of 2017, even though smartphones currently make up 31% of the mobile market. It seems a huge chunk of our population is steadily adopting to smarter phones. Pakistan is also estimated to have 17 million new mobile subscribers by 2020, TechJuice reports from the GSMA’s 2017 Mobile Economy Report. These trends are indications of increasing technology awareness in our nation. As mobile and smartphone users increase in different income groups, we can expect changes in the lifestyle of entire communities. More and more people will have access to the convenience and technology solutions offered by and through smartphones. The increased number of users bring business opportunities for entrepreneurs that want to use this medium to access a wide base of customers.

The current round of the HIES covers 24,238 households. It provides important information on household income, savings, liabilities, and consumption expenditure and consumption patterns at national and provincial level with urban/rural breakdown.

Pakistan Social And Living Standards MeasurementBRIEF ON PAKISTAN SOCIAL & LIVING STANDARD MEASUREMENT (PSLM) SURVEY 2004-15

The PSLM Project is designed to provide Social & Economic indicators in the alternate years at provincial and district levels. The project was initiated in July 2004 and will continue up to June 2015. The data generated through surveys is used to assist the government In formulating the poverty reduction strategy as well as development plans at district level and for the rapid assessment of program in the overall context of MDGs. As such this survey is one of the main mechanisms for monitoring MDGs indicators. It provides a set of representative, population-based estimates of social indicators and their progress under the PRSP/MDGs. For Millennium Development Goals (MDGs), UN has set 18 targets for 48 indicators for its member countries to achieve by 2015. Pakistan has committed to implement 16 targets and 37 indicators out of which 6 targets and 13 indicators are monitored through PSLM Surveys. The PSLM surveys are conducted at district level and at Provincial level respectively at alternate years. PSLM District level survey collects information on key Social indicators whereas through provincial level surveys (Social & HIES) collects information on social indicators as well as on Income and Consumption while in specific sections also information is also collected about household size; the number of employed people and their employment status, main sources of income; consumption patterns; the level of savings; and the consumption of the major food items. However, Planning Commission also uses this data for Poverty analysis.

An other important objective of the PSLM Survey is to try to establish the distributional impact of development programs; whether the poor have benefited from the program or whether increased government expenditure on the social sectors has been captured by the better off.

The sample size of PSLM surveys district level is approximately 80000 households and approximately 18000 at Provincial level.

So Pakistan where even cities have notorious blackout has more refrigerator ownership? This is strange. Is it because more meat consumption and Indians buy vegies from corner bazars every day?

I doubt power supply has anything to do with this. Either survey was not correct, or something other than power supply issue.

I think Pakistani being more wealthy in general has to with more resources as well. Isn't it true that 50% Pakistan live in Punjab. That is the most resource rich area in subcontinent. How many battles were fought for that land? Also growth wise Pakistan beat india for about 50 years, there itself cumulative effect will be tremendous. Why does Riaz thinks that everybody in India is not aware of Pakistan's relative wealth?

Also is Pakistan like Kerala? I think percentage of Pakistanis per household working abroad must be considerably high. What are the remittance flow in India / Pakistan. I bet Pakistan per person is multiple of India. Kerala has communist ruining industry but somehow average Karalite is richer, more educated and better in every other HDI than most Indians.

IMF and World Bank data shows a better Indian per-capita picture. Of course the question is, what is the size of a household in Pakistan and in India? The corresponding sizes are 6.7 & 4.8 persons or Pakistani household is 40% bigger than an Indian household.

Julian: "IMF and World Bank data shows a better Indian per-capita picture"

The average in India is heavily skewed by highly unequal distribution of income and wealth in India. Top 1% of Indians own 58.4% of wealth.

Pakistan does significantly better than India when comparing mean income and wealth.

Average Pakistani adult is 20% richer than an average Indian adult and the median wealth of a Pakistani adult is 120% higher than that of his or her Indian counterpart, according to Credit Suisse Wealth Report 2016. Average household wealth in Pakistan has grown 2.1% while it has declined 0.8% in India since the end of last year.

The proportion of car-owning households in the country was 5%, according to the 2011 census data. That proportion has more than doubled, and stands at 11% today as per the ICE 360° survey 2016. The proportion of two-wheeler owners has increased 15 percentage points to 36%, while the proportion of bicycle owners has increased 13 percentage points since 2011 to 58%, the survey shows.

Households in the top quintile account for a majority of the cars and more than a third of two-wheelers in the country. The top 10% accounts for 46% of the cars and 22% of two-wheelers in India. The bottom quintile, which is the poorest 20%, accounts for a majority of the bicycles in the country, as per the survey. Households having a motorcycle or a scooter or a scooty or a moped have been categorized as owning a two-wheeler in this analysis.

Agha Steel Industries Ltd. is planning Pakistan’s biggest-ever private sector initial share sale this year to help boost output as China funds more than $55 billion in infrastructure projects across the nation and a buoyant stock market spurs investor demand.

The Karachi-based company plans to raise as much as 10 billion rupees ($95 million) selling a 25 percent stake, Executive Director Hussain Agha said in an interview. The sale will be the largest since the 12-billion rupees government stake sale of Habib Bank Ltd. in 2007, the country’s largest IPO yet.

Steel and cement makers in Pakistan are expanding to meet demand as the “One Belt, One Road” trade route financed by China spurs construction. The nation’s economy has grown at about 5 percent annually since 2013, encouraging Agha’s peers including International Steels Ltd. and Aisha Steel Mills Ltd. to lift production.

“You need roads, sky rises and housing,” said Agha. “Pakistan’s steel industry is in an infancy stage and growing at a massive pace -- the whole environment will change.”

The company will use the funds for $50 million expansion that will triple output to 500,000 metric tons within two years. Production will then double to a million tons by 2023, he said. Habib Bank has been appointed financial adviser while Arif Habib Ltd. and BMA Capital Ltd. were picked as book runners for transaction.

Pakistan’s steel output grew 23 percent to 3.6 million tons in 2016, the biggest gain among 40 nations, according to the World Steel Association. Agha Steel expects construction-grade steel, such as rebars and wire rods, to grow as much as 12 percent annually for the next three years.

The construction sector expanded 13 percent in year ended June 2016, more than twice the pace in the previous 12 months, according to State Bank of Pakistan’s annual report. Rapid urbanization and rising income levels has left the nation with an annual shortfall of 500,000 homes, according to real-estate developer Arif Habib.

“Real-estate is the main engine for this growth, it has really picked up,” said Ayub Khuhro, chief investment officer of Karachi-based Faysal Asset Management Ltd., which has about 8 billion rupees in stocks and bonds. “The government is also willing to protect companies with anti-dumping measures.”

India just announced its October-December GDP figures, supposedly showing it is still the fastest-growing major economy. You should not believe it. Every quarter there are questions about India’s GDP, with this one no exception. But there is a bigger problem: India refuses to publish the full GDP series, so that the world may not be able to trust the Indian government’s claims at all.

Economic growth should be measured by personal or household income. Instead it is measured by GDP, an accounting tool far more relevant for top-down planners than ordinary people. This is hardly India’s fault, but India has done a small bit to make the problem worse.

In January 2015 India revised recent GDP growth figures higher, among other things raising the fiscal year 2013-4 gain from 5% all the way to 6.9%. It is at this point the fastest-growing economy boasts began. Questions about the revision were raised immediately, including by current Indian government officials, because purportedly faster GDP did not fit with many other indicators. (It still does not.)

Since then, however, the new series has become widely used. While the Indian government argues that it better matches global practices, it manifestly fails to do so in an indispensable respect. The back series – the necessary base for calculations of ongoing GDP growth – has not been published more than 2 years later. Technically, we do not know India’s GDP in 2010, or anytime earlier.

The back series was first to be published December 2015, then mid-2016, and now has no apparent due date and will not be complete. The “globally accepted” new approach therefore makes it impossible to assess India’s GDP trajectory, potentially important information for a country aspiring to rapid development.

The best way to proceed in this case was to start from the beginning, applying the new method to a base year as far in the past as possible and generating new data forward from there. The obvious question is how India determined growth when earlier years could not serve as a base? The answer is unfortunately political: the government’s desire to report faster growth trumped accuracy.

It all may sound familiar. India seemingly always has an eye on China. If China pulled a stunt like this, its “world-beating” claims would be roundly ridiculed. India initially had the benefit of the doubt because it is a multi-party democracy with a competitive press. Those are very good reasons, but not good enough. One benefit of an open society is transparency, and the Indian government is being opaque in self-interested fashion.

India had a poor reputation for statistics quality before the GDP revision. It just revised a GDP growth figure from 7.2% all the way down to 6.5% for Q415.There are other, crucial statistics practices, for example concerning rural electrification, that are clearly biased in the government’s favor. In this context, hiding past GDP looks like a continuation of previous behavior.

------Most people from pluralist open societies want to see pluralist, open India do well. For now, however, India has the same level of economic credibility as a country like Vietnam (which publishes GDP results even before the year ends). World-beating growth? Maybe. Or maybe poorly founded quasi-propaganda.

Pakistan is determined to funnel more money toward infrastructure, small businesses and the poor, and the government has found an array of international partners to make it happen.

Finance Minister Ishaq Dar recently spoke with The Nikkei about Pakistan's development drive and the federal budget for the coming fiscal year through June 2018, which he said will focus on generating 6% gross domestic product growth.

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Speaking about the budget to be announced on May 26, Dar said: "After [achieving] macroeconomic stability, we have fully focused on higher GDP growth that brings a better life to people, better per capita income, job opportunities and fills the gap in infrastructure demand."

Next fiscal year, he said, "our efforts will give [growth] another boost. Some fiscal measures and policies will be introduced."

FUNDING DEVELOPMENT Dar pointed to a recent agreement with the World Bank-affiliated International Finance Corporation to set up a Pakistan Infrastructure Bank.

The bank will provide financing for infrastructure projects undertaken by the private sector, he said, describing the new lender as an "equal partnership by the Pakistan government and IFC for 20% each." Other stakeholders from around the world will account for the rest, he said. The bank is expected to have paid-up capital of $1 billion.

And the infrastructure bank is just one piece of the puzzle. "With partnerships with the U.K.'s Department for International Development and the German government-owned development bank KfW, we have created the Pakistan Microfinance Investment Co.," Dar said. Its three-year business plan calls for boosting the number of "beneficiaries of microfinance from the current 4 million to 10 million."

The government, the U.K. aid agency and KfW are teaming up to create the Pakistan Poverty Alleviation Fund. Pakistan will hold 49% of the fund, with the U.K. and German partners holding 37% and 14%, respectively.

Islamabad has also established the Pakistan Development Fund, which will invest in public-sector projects outside the budget. The government's initial investment comes to $1.5 billion.

As for the economy, Dar said the government is "hoping for over 5% growth" for the current fiscal year, noting that the "World Bank is projecting 5.2% in 2017 and 5.5% in 2018."

Looking ahead, he suggested 6% growth is possible for next fiscal year, and that it could reach 7% the following year. "Our GDP is reportedly underestimated by 22-25%. If [the reported growth rate for] fiscal 2017-18 is 6%, it will be actually 7% or more," Dar said.

According to Dar, an old method of calculating national output is responsible for the discrepancy. "It has to be upgraded," he said. "And businesses, especially small and medium-sized businesses, have not been [brought into] the database on which GDP is calculated over 10 years."

To paint a more accurate picture, Dar said he recently "authorized the World Bank to carry out a study, and they will take one year."

UNDAUNTED BY DEFICITS Although Pakistan has had success containing inflation and attracting foreign direct investment, its fiscal and current-account deficits are a risk factor. Dar, however, disputed that, saying: "The fiscal deficit is not an issue. From fiscal 2012-13 to 2015-16, we cut the fiscal deficit from 8.8% to 4.6% of GDP. This fiscal year, we expect it will be close to 4.1%."

Dar chalked up the deficit to two major budget items. One is infrastructure development. "We see a jump from 600 billion rupees ($5.73 billion) in fiscal 2012-13 to 1,600 billion rupees in fiscal 2016-17."

China takes ‘project of the century’ to PakistanAs part of its ‘One Belt, One Road’ project Beijing is pumping $55bn into its neighbour amid doubts over who really benefits

https://www.ft.com/content/05979e18-2fe4-11e7-9555-23ef563ecf9a

The leak of China’s original proposals for the CPEC agreement in the Pakistan newspaper Dawn this week heightened fears. The terms prioritise the industrial ambitions of the Xinjiang Production and Construction Corps, a quasi-military organisation vital to Beijing’s oil and security policies which also dominates the agricultural economy of the frontier region of Xinjiang.

Comparing it with the trading organisation that paved the way for British rule in India, the head of a large investment company in Pakistan says: “We have to be careful if we don’t want this to turn into a repeat of the East India Company. If we squander it, it will.”

China wants to complete four main tasks via CPEC: expand the Gwadar port on Pakistan’s south coast, which it financed, built and owns, build a fleet of power plants, construct road and rail links and set up special economic zones where companies can enjoy tax breaks and other business incentives.

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In building infrastructure, Beijing is doing for Pakistan what Islamabad has been unable to do for itself, especially as far as power generation is concerned. Peak electricity demand in Pakistan is 6 gigawatts greater than it can generate — equivalent to about 12 medium-sized coal power plants. Blackouts in many parts of the country last for several hours a day.

To meet this shortfall China is expected to spend more than $35bn — about two-thirds of the entire CPEC budget — building or helping to construct 21 power plants, which will be mainly fuelled by coal. The combined 16GW of capacity that they could provide would repair Pakistan’s supply gap twice over.

The building work associated with CPEC has already boosted heavy industry in the country. Arif Habib, one of the country’s biggest business conglomerates, says it is trebling its cement production in anticipation of CPEC.

“The risk is that down the line China will call the shots and that we will pay the price later,” says Syed Murad Ali Shah, the chief minister of Sindh, the province in which Karachi is located. “It is up to us.”

The Chinese plan, revealed by Dawn newspaper to have been delivered in December 2015, has only added to those concerns. It talks about thousands of acres of agricultural land leased out to Chinese enterprises to develop seed varieties and irrigation technology. It would install a full system of monitoring and surveillance in cities from Peshawar to Karachi, with 24-hour video recordings on roads. It would build a national network of fibre-optic cables to boost internet access.

Key to this is the XPCC. Under the plan the Han Chinese economic and paramilitary organisation is mandated to invest in Pakistan as a springboard for economic development around Kashgar, the heartland of 11m Turkic-speaking Muslims known as Uighurs.

Ministers in Islamabad say the document contains proposals originally drawn up by Beijing, but will not say how far the draft agreements, which are still being negotiated, differ from it.

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Whatever the concerns in Pakistan that Islamabad is ceding too much power to China, many in the business and political communities argue that the benefits from the infrastructure projects are well worth it.

“Pakistan requires money and money has no colour,” Kimihide Ando, head of Mitsubishi Corp in Pakistan, says.

Others argue that, following the problems with the free-trade agreement, Pakistan’s ministers will be more savvy this time. “The Chinese have taken us for a ride [before] but we have let them,” says Ehsan Malik, chief executive of the Pakistan Business Council. “Given we have made huge mistakes before, hopefully we will learn this time.”

China and Pakistan have inked a memorandum of understanding (MoU) for the construction of two mega dams in Gilgit-Baltistan, a part of India’s Jammu and Kashmir state that remains under latter’s illegal occupation. The MoU was signed during the visit of Pakistan’s Prime Minister Nawaz Sharif to Beijing for participation in the recently concluded Belt and Road Initiative.

The two dams, called Bunji and Diamer-Bhasha hydroelectricity projects, will have the capacity of generating 7,100MW and 4,500MW of electricity respectively. China will fund the construction of the two dams, investing $27 billion in the process, a report authored by Brahma Chellaney in the Times of India has noted.

According to Chellaney, India does not have a single dam measuring even one-third of Bunji in power generation capacity. The total installed hydropower capacity in India’s part of the state does not equal even Diamer-Bhasha, the smaller of the two dams.

The two dams are part of Pakistan’s North Indus River Cascade, which involves construction of five big water reservoirs with an estimated cost of $50 billion. These dams, together, will have the potential of generating approximately 40,000MW of hydroelectricity. Under the MoU, China’s National Energy Administration would oversee the financing and funding of these projects.

Per Capita Income in dollar terms has witnesseda growth of 6.4 percent in FY 2017 ascompared to 1.1 percent last year. The percapita income in dollar terms has increasedfrom $ 1,531 in FY 2016 to $ 1,629 in FY2017. Main contributing factors for the rise inper capita income are higher real GDP, growth,low population growth and stability of PakRupee.

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Real GDP growth was abovefour percent in 2013-14 and has smoothlyincreased during the last four years to reach5.28 percent in 2016-17, which is the highest in10 years.

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The agriculture sector metits growth target of 3.5 percent, helped bygovernment supportive policies and byincreased agriculture credit disbursements.During 2015-16, the agriculture creditdisbursement was close to Rs 600 billion whileduring 2016-17, the target was raised to Rs 700billion. During July-March 2016-17, thedisbursement was observed to be 23 percenthigher as compared to the previous year. Thesedevelopments, along with the Prime Minister’sAgriculture Kissan Package together with otherrelief measures have started yielding positiveresults.The large-scale manufacturing output isprimarily based on Quantum IndexManufacturing (QIM) data, which show anincrease by 5.06 percent from July 2016 toMarch 2017. Major contributors to this growthare sugar (29.33 percent), cement (7.19percent), tractors (72.9 percent), trucks (39.31percent) and buses (19.71 percent). Highgrowth of sugar is based on production of 73.9Million Tons of Sugarcane as compared to 65.5million tons last year, which represents anincrease by 12.4 percent.Large Scale Manufacturing growth has pickedup momentum and posted a strong 10.5 percentgrowth in the month of March 2017 comparedto 7.6 percent in March 2016. The YoY growthaugurs well for further improvement in growthduring the period under review.On average, the LSM growth stood at 5.06percent during July-March FY 2017 comparedto 4.6 percent in the same period last year. Thesectors recording positive growth during JulMarFY 2017 are textile 0.78 percent, food andbeverages 9.65 percent, pharmaceuticals 8.74percent, non-metallic minerals 7.11 percent,cement 7.19 percent, automobiles 11.31percent, iron & steel 16.58 percent, fertilizer1.32 percent, electronics 15.24 percent, paper &board 5.08 percent, engineering products 2.37percent, and rubber products 0.04 percent.Pakistan is bestowed with all kinds of resourceswhich also include minerals. Pakistan possessesmany industrial rocks, metallic and nonmetallic,which have not yet been evaluated. Inthe wake of the 18th Amendment, provincesenjoy great freedom to explore and exploit thenatural resources located in their authority, withthe result that they are currently undertaking anumber of projects using their own resources,or in collaboration with the federal governmentor with donors to tap and develop theseresources.The services sector recorded a growth of 5.98percent and surpassed its target which was setat 5.70 percent. Wholesale and retail tradesector grew at a rate of 6.82 percent. Thegrowth in this sector is bolstered by the outputin the agriculture and manufacturing sectors.The share of Agriculture, Manufacturing andImports in Wholesale and Retail Trade growthis 18 percent, 54 percent and 15 percentrespectively. The Transport, Storage andCommunication sector grew at a rate of 3.94percent. Finance and insurance activities showan overall increase of 10.77 percent, mainlybecause of rapid expansion of deposit formation(15 percent) and demand for loans (11 percent).

Read more at:http://economictimes.indiatimes.com/articleshow/58973943.cms?utm_so...

"They (India's national accounts) show India's growing at seven per cent a year. But I along with many other economists, I'm afraid don't believe the national accounts. They were redone in 2011," Vijay R Joshi, Emeritus Fellow of Merton College, Oxford and Reader Emeritus in Economics, University of Oxford, told a Washington audience.

Joshi, the author of a book titled 'India's Long Road--The Search for Prosperity' alleged that India's growth rate is back at 5.5 per cent, but the na ..

Passenger vehicle sales in India crossed the three million milestone for the first time in 2016-17, with the segment witnessing a growth of 9.23 per cent.

For the fiscal ended March 2017, domestic passenger vehicles (PV) sales were at 30,46,727 units against 27,89,208 in the previous year, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

On the sales performance, SIAM Deputy Director Sugato Sen said the year witnessed the highest sales of passenger vehicles, utility vehicles, motorcycles and scooters.

“In terms of passenger vehicles, we crossed the three million mark for the first time,” Sen told reporters here.

“The growth in PV sales is driven largely by demand for utility vehicles ahead of sedans and hatchbacks,” he added.

Utility vehicles

During the year, utility vehicle sales were at 7,61,997 units against 5,86,576 units in the previous fiscal, a growth of 29.91 per cent.

“This is the highest growth rate achieved by the UV segment after 2013-14 when it grew by 52 per cent,” Sen said.

SIAM Director General Vishnu Mathur said there is a readjustment happening in the Indian passenger vehicle market with demand for utility vehicles rising at a much faster rate ahead of conventional cars.

Car sales

Domestic car sales during the year grew 3.85 per cent to 21,02,996 units from 20,25,097 units in the previous year. This was the lowest growth since 2014-15, when car sales rose 5.09 per cent.

Maruti Suzuki’s Vitara Brezza, Hyundai’s Creta, Renault Duster, Mahindra Scorpio and Ford Ecosport are among the popular SUV models in India at present.

Mathur said the industry has been able to grow despite challenges of ban on big diesel SUVs and cars in the National Capital region and demonetisation.

“As for demonetisation, the impact was for only two months on the PV segment and recovery was quick, but it was prolonged in the two-wheeler segment,” he said.

In 2016-17, market leader Maruti Suzuki India retained its top position in the domestic PV space selling 14,43,641 units, a growth of 10.59 per cent.

Rival Hyundai Motor India was a distant second with 5,09,705 units, up 5.24 per cent followed by home-grown Mahindra & Mahindra in the third spot with 2,36,130 units, down 0.07 per cent.

Tata Motors overtook Honda Cars India to occupy the fourth spot with 1,72,504 units, up 15.45 per cent, while the Japanese rival sold 1,57,313 units during the year, down 18.09 per cent.

Total two-wheeler sales during the year stood at 1,75,89,511 units against 1,64,55,851 in the previous fiscal, up 6.89 per cent.

Motorcycle sales

Motorcycles sales in 2016-17 were at 1,10,94,543 units compared with 1,07,00,406 in the previous fiscal, up 3.68 per cent.

Market leader Hero MotoCorp sold 56,93,681 units during the year compared with 56,03,136 in the previous fiscal, up 1.62 per cent. Rival Bajaj Auto posted sales of 20,01,391 units against 18,98,957 in 2015-16, up 5.39 per cent.

Honda Motorcycle and Scooter India (HMSI) had bike sales of 15,36,055 units last fiscal against 14,94,153 units in 2015-16, a growth of 2.8 per cent.

Scooter sales

Scooter sales in 2016-17 were at 56,04,601 units in comparison to 50,31,678 in the previous fiscal, up 11.39 per cent.

Segment leader HMSI posted 31,89,012 units during the year as against 27,89,537 in 2015-16, up 14.32 per cent.

Chennai-based TVS Motor Co posted a growth of 6.81 per cent in its domestic scooter sales at 8,26,291 units against 7,73,597 units sold in the previous fiscal, becoming the number two player in the category.

Hero MotoCorp dropped to third position with its scooter sales last fiscal at 7,89,974 units compared with 8,18,777 units in 2015-16, down 3.51 per cent.

SIAM said that during 2016-17, commercial vehicle sales grew 4.16 per cent to 7,14,232 units from 6,85,704 a year earlier.

The retail sector seems to be priming the economic pump. As per latest data released by the Pakistan Bureau of Statistics, the overall output of the large-scale manufacturing (LSM) index grew by 5.69 percent in Jul-May FY17. (For more on LSM going forward, please read “L-S-M!” published August 2).

http://www.brecorder.com/2017/08/03/362880/electronics-powered-on/

Among the top-three growth industries in the FY17 LSM index is ‘electronics’ – the other two being ‘iron and steel products’ and ‘automobiles’. Having a roughly 2 percent weight in the LSM index, the electronics industry grew by a recent high of 16.18 percent year-on-year in 11MFY17.

The key electronics items illustrated in the graph have all grown between FY11 and FY16. However, the growth in refrigerators and air-conditioners has been the most prominent. In the more recent period, there is double-digit growth all around, except for the TV sets. During 11MFY17, production of deep freezers grew by 28 percent, refrigerators 24 percent; electric fans 21 percent, and air-conditioners 10 percent, on a year-on-year basis.

In tandem with growth in domestic retail, the production of major electronics items is expected to continue its recent growth run. The middle-class, both its existing members and aspirants, tend to drive the purchases of white goods and electronics. If the economic growth gathers pace, the resulting higher per capita income will push the sales of both lifestyle and convenience products. Already, there is an apparent proliferation of housing schemes in both major and small cities – a sign of upward mobility – that is also a driving factor in appliance sales.

While folks want comfortable lifestyles, not many households currently have that. As per Euro monitor, in 2016, mere 55 percent of households had a washing machine, 43 percent had a refrigerator, 20 percent had a microwave oven, and 16 percent had a deep freezer. There is obviously potential there, more so in rural areas where ownership of household durables is markedly lower than urban areas. Continued flows of remittances and growth in farming incomes are going to be driving forces for electronics sales. But who will feed all that demand? While almost all of the demand for electric fans and refrigerators is being met through local production, the same is not the case for air conditioners, LED TV sets, deep freezers, and washing machines. The domestic players are conscious of the need to invest in product design, functionality, and quality of service. But the price-conscious mass market doesn’t encourage them to really go the extra mile, thus hampering their ability to compete with the imported products.

The rising number of its billionaires masks #India’s widening income #inequality. #Modi #BJP https://qz.com/1070450 via @qzindia

India is staring at a staggering income-inequality crisis.A research paper published by French economist Thomas Piketty and Lucas Chancel—based on the latest income tax data—suggests that inequality in India may be at its highest level since 1922, when India introduced the income tax.The share of national income held by the top 1% of the country’s population has increased dramatically, particularly since the 1980s, the economists say in their paper published on Sept. 05 (pdf).

“The top 1% of earners captured less than 21% of total income in the late 1930s, before dropping to 6% in the early 1980s and rising to 22% today,” the paper says.Piketty is widely recognised for his work on income inequality, particularly through his bestselling book Capital in the Twenty-First Century. Chancel is the co-director of the World Inequality Lab and of the World Wealth & Income Database (WID.world) at the Paris School of Economics.Their study shows that income inequality was the lowest in the 1970s and 1980s, a period when India was still a government-controlled economy and its GDP growth was quite low.“Over the 1951-1980 period, the bottom 50% group captured 28% of total growth, and incomes of this group grew faster than the average, while (the) top 0.1% incomes decreased,” their paper says. “Over the 1980-2014 period, the situation was reversed; the top 0.1% of earners captured a higher share of total growth than the bottom 50% (12% vs. 11%), while the top 1% received a higher share of total growth than the middle 40% (29% vs. 23%).”

Last year, a report by Credit Suisse Research Institute said that the top 1% of the country’s population held 58.4% of its wealth, up from 53% in 2015. Within the BRICS group, only Russia’s wealthy controlled more of their country’s wealth. Since 2010, India has added a billionaire every 33 days and Indians’ share in the global billionaires’ club has grown from 1% to 5% over the last 20 years.Meanwhile, Piketty has also reiterated his demand for more transparency in sharing income tax data. Access to data is crucial in measuring inequality and understanding the distribution of wealth. India used to publish the All India Income Tax Statistics until 2000. In 2016, the income tax department released tax tabulations for the period between 2012 and 2014.

I'm a student of Applied Psychology, currently working on my own research. I'm having trouble to find the current classification of monthly income to measure socioeconomic status into the class differences. I need them with authentic reference according to economics survey of Pakistan or Pakistan bureau of statistics. I wonder if you could me help.

Ayesha: "I'm having trouble to find the current classification of monthly income to measure socioeconomic status into the class differences. I need them with authentic reference according to economics survey of Pakistan or Pakistan bureau of statistics."

KARACHI: Sales of passenger cars rose 20.4 to 103,432 units in the first half of the current fiscal year of 2017/18, official data showed on Wednesday.

Car sales stood at 85,901 in the same period of last fiscal year, according to Pakistan Automotive Manufacturers Association (PAMA).

In December 2017, sale of cars fell to 16,159 units as against 17,233 units in the previous month and 14,024 units in the same month a year ago.

Topline Securities, in a report, said the decline was due to the year-end’s leaner period of auto sales.

A total of 47,087 cars of 1,300cc or above category were sold during the first half, up 5.92 percent over the same period a year earlier.

But, the sale in the category declined to 6,652 units in December 2017 as against 8,087 in November and 6,880 units in December 2016.

Arslan Hanif, an analyst at Arif Habib Limited attributed the decline to crackdown of Indus Motor Company and cancellation of pre-booked orders of cars due to excess premium charged by dealers.

Under the category of 1,000cc category, a total of 23,642 units of Suzuki Cultus and Suzuki WagonR were sold, up 61 percent against 14,669 units sold last year.

One analyst said there is a huge increase in 1,000cc cars, as both WagonR and new variant of Cultus saw an amazing success in the country during the period under review.

Dispatch of 1,000cc category cars exhibited an uptick due to a massive demand from Careem, Uber and other transportation businesses.

Sales of 800cc and below 1,000cc cars, Suzuki Mehran and Bolan, increased 22 percent to 32,703 units in July-December from 26,780 units in the corresponding period last year.

“We believe Pak Suzuki continued to be major beneficiary as majority of used-car imports fall under lower engine capacity segment,” Topline Securities added.

A total of 4,562 buses and trucks were sold in the six-month period, up 17.5 percent.

Sales of farm tractors grew 54.3 percent to 32,310 units during the period under review.

A total of 6,797 jeeps were sold during the July-December period, depicting manifold growth as compared to 205 units sold during the same period last year.

The hefty sales were visibly due to an introduction of Honda’s BR-V. Honda recorded sales of 5,159 units of its new edition during the first half.

Sale of pick-ups was recorded at 13,909 units during the six months as against 11,427 units sold in the corresponding period last year.

Pakistan Automotive Manufacturers Association data further showed that a total of 940,825 motorcycles and three-wheelers were sold during the period under review, up a 19 percent over the same period a year ago.

KARACHI: Motorcycles production in Pakistan is reaching to its highest level with 2.3 million quantity of produced during the ten months of 2017 while average 7,408 new motorcycles hit roads daily in the country.The production of motorcycles increased by 22.34 percent during the first four months of fiscal year 2017-18 (FY18), as compared to the corresponding period of last year, latest data of Pakistan Bureau of Statistics (PBS) revealed.

PBS’s latest data reveals that the motorcycle production including locally assembled Japanese brand and Chinese made imported motorcycles’ brand stood at 2251917 units in the first ten months (January-October) of 2017. It is to be noted that at least 2.5 million motorcycles were manufactured during past year while the number of motorcycles’ production in Pakistan has already crossed the 2 million mark in just ten months of this year.It has been observed that in the absence of any public transport system in Pakistan, lower middle-income class of the country has been compelled to compromise their safety by choosing the two-wheelers as their conveyance.

Muhammad Zahid Iqbal Malik of Pakistan Bikers Club (PBC) said motorcycle assemblers in Pakistan produce low quality products just to maintain price stability. He said steady prices besides easy installment plans are the main reasons behind rapid growth of two wheelers in Pakistan.

He said rapid motorcycle production in Pakistan apparently portrays brighter picture but it is a harsh reality that among 2 millions motorcycles produced in 2017 we didn’t manufacture even a single bike here with 100% Pakistani parts.

“It is true that motorcycle industry is booming and providing opportunities for locals and supporting the economy. But Pakistan is still far behind from its neighbouring country as Indian company Hero started manufacturing with Honda Japan and now it has become a separate entity bigger than Honda”, he added.Association of Pakistan Motorcycle Assemblers (APMA) Chairman Mohammad Sabir Shaikh said globally, there is an average life of a motorcycle, but in Pakistan with the nonexistence of any such law, the tax departments are allowed to collect lifetime tax at the time of registration of a new bike.He further added that the situation is really alarming as the authorities don’t follow any standards for motorcycles’ registration which is making the motorcycle as the leading cause of fatalities.

He was off the view that the government should set the effective life limit of a motor cycle for tax reasons since the tax offices use 100 years as their average life at present. He suggests that the tax authorities should register a motorbike only for five years and after that period the registration of the motorbikes should be subjected to fitness tests.

As many as 5,088 units of Suzuki Every were brought into Pakistan in 2017, up 14.6pc year-on-year. Imports of Daihatsu Hijet rose 34.5pc to 3,367 units.

The arrival of Suzuki Alto doubled to 4,158 units from 2,013 units a year ago. Suzuki WagonR imports surged 115pc to 3,574 units.

Imports of Honda Vezel and Toyota Land Cruiser stood 2,431 units and 3,301 units in 2017, up 57.5pc and 55.7pc, respectively, on an annual basis.

The overall volume of imported used vehicles grew 65pc to 76,635 units in 2017 from 46,500 units a year ago, data showed.

Low interest rates, increase in auto financing by banks and lifting of vehicles by investors for cab services like Careem and Uber boosted the imports of used cars as well as sales of locally assembled vehicles.

The government imposed regulatory duties on the purchase of foreign used vehicles in October, which largely failed to dent the overall annual import figures.

Sales of locally produced cars rose 20.4pc on a year-on-year basis to 103,432 units in July-December.

According to the Pakistan Bureau of Statistics, overall imports of cars increased 64pc to $276 million in July-December.

Pakistan Association of Automotive Parts and Accessories Manufacturers’ former chairman Aamir Allawala said the local vending industry lost estimated revenue of Rs23 billion last year.

The estimate is based on taking the average local content per vehicle of Rs300,000 on imports of 76,645 units in 2017. This is in contrast to a loss of Rs14bn in 2016 with imports of 46,500 vehicles.

He said imports of used cars were the biggest impediment to investment by existing assemblers, new entrants and part makers.

He said the government has modified the procedure for the payment of duties and taxes to curb imports of used vehicles.

“Time has come for the existing players to make prompt investment in capacity expansion, improve localisation, introduce new models and reduce delivery time to eliminate the menace of premium,” he said, adding that an increase in production will boost tax revenue and create jobs.

In the near future, Hyundai, Kia and Renault will set up plants in the country.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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